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Ha Dung plans to pilot Indochina Airlines again by the end of 2011
Indochina Airlines, which was believed to have bankruptedbecause it has disappeared from the aviation market for a long time, and Ha Dung, the owner of the disreputable airline, who was thought as having given up the dream of flying, has appeared again on local newspapers.
VnExpress newspaper has reported that Indochina Airlines is planning to resume flights by the end of 2011. The plan has been approved by the Civil Aviation Authority of Vietnam (CAAV) which says it will submit the plan to the Ministry of Transport.
With the airline restructuring plan, managers of the airline, which was thought as “waiting for the death certificate”, have sent a letter to the Prime Minister, asking the Government to create most favorable conditions for the airline to continue its operation.
The information has been officially confirmed by Ha Dung, who is also a well known musician in Vietnam, with VnExpress’ newspaper on January 11, 2011.
As far as I know, Indochina has persuaded the state management agencies to give the airline one more chance. And this is not for the first time the airline does this. So what are the new points in the latest restructuring plan?
Indochina Airlines’ restructuring plan focuses on three main points 1/ Increasing the legal capital to 500 billion dong in order to open international air routes in the near future. 2/ Mobilizing investment capital to the required level in order to ensure sustainable development and 3/ Reorganizing the fly network and having the fleet of small aircrafts in order to develop short distance air routes.
Regarding the capital, we have the investors who have committed to pour capital, but they need more time to fulfill their commitments. It is understandable: investors need to gather strength on the main business fields first, and then they think of pouring capital into Indochina Airlines. A lot of individual and institutional investors have been keeping their interests in Indochina Airlines and they have been keeping contact over the last year and waiting for their opportunities.
There will be many changes in our business strategy. When we joined the market, we only had six months for preparation with the capital of $12 million. But now we need more time. We will purchase aircrafts and employ our pilots instead of chartering. In the past, we did not care much about profit and loss, because we needed to build our brand first. However, we now have to operate for profit, as we have a good brand already.
If chartering aircrafts, we will have to pay $700-800,000 a month, but if we have aircrafts of our own, the expenses will be lower, at $300-500,000 a month, or we can save 35-40 percent of expenses.
As you may know, some airlines have decided to join forces with foreign partners in order to take full advantage of the foreign partners’ financial capability and business governance. Has Indochina Airlines thought of any solution?
In late 2008, we negotiated with AirAsia and they valued Indochina Airlines at $67 million. Recently, we hired three independent consultancy firms to value the brand, and they said the brand is worth $270 million, supposed that we have three aircrafts in 2010 and 10 aircrafts later. Our viewpoint is that Indochina Airlines is a purely Vietnamese airline.
Regarding the foreign investment, there are two kinds of investment: either foreign airlines inject their money in and join the management, or financial investors who only pour capital. Indochina Airlines will consider the latter kind of investment, but only in a far future.
In order to continue to exist, you should persuade people and your partners that you will be able to pay debts. However, you were quiet for a long time?
I had no other choice than keeping low profile, but I believe that this was the best choice. At the time when Indochina Airlines stopped flying, I was busy calling for capital from different sources, and I did not sit idle. I will pay debts. If we can survive, our partners will also be able to pay their debts.
You once persuaded the management agencies to allow Indochina Airlines to continue operation, saying that investors had agreed to pour 400 billion dong in capital. However, in fact, only 150 billion dong was injected in the airline, and the airline had to stop its operation?
It is more difficult for us to call for capital only from domestic investors. I have also asked the Prime Minister to create best conditions for us to operate. If the Government approves our plan, we will make every effort to build a Vietnamese airline for Vietnamese people.
vietnamnet, VnExpress
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